No fraud surge from contactless credit cards - Visa

JONO GALUSZKA J

Last updated 09:00 25/01/2014

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Visa has defended the security of contactless cards after they were fraudulently used by criminals, saying card fraud has been around "since the beginning of time" and contactless technology will not make the matter worse.

The Manawatu Standard reported yesterday on two Manawatu men who used stolen contactless cards to buy goods.

The cards give people the ability to bypass the need for a pin number or signature for payments under $80, simply by waving the card near a payment terminal.

Visa's New Zealand country manager, Caroline Ada, said contactless technology had not created a surge in frauds. There were more than 1.5 million contactless Visa cards, 15,000 terminals for the cards and more than 1 million transactions with the cards in September, but no increase in reported fraud.

She said cards had long been targeted by thieves, often by taking them out of mail boxes.

"This kind of fraud has been going on since the beginning of time."

People would forge signatures, or skim the card's details by using a machine, before contactless technology.

Ms Ada said skimming could not take place with chip and contactless cards, as they did not store the right information.

There have been multiple reports recently about safety concerns with the cards, but Ms Ada said it was down to exposure. "People are using it more, seeing it more, and start seeing the fraud and they think it's actually not safe."

There were multiple levels of security on the cards, ranging from having them posted before being activated to banks having fraud teams watching for suspicious card use. But the best protection for consumers was a zero liability clause.

Ms Ada said if a user knew their contactless card had been stolen or lost and told their bank, charges on the card would be refunded.

Consumer New Zealand finance writer Kate Sluka said thieves used to take the cards, sign a receipt and bank on people not checking if the signatures matched.

"[These two men] could have got away with it, contactless or not."

There was a way to put a pin on a contactless card for sums less than $80, but it would not solve the issue of people forging signatures or using it for online payments, she said.

"You just need to be aware of where your card is. Treat your card like it is cash."